First quarter sales, income up at Monterey Gourmet

by Ron Sterk
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SALINAS, CALIF. — Monterey Gourmet Foods, Inc. said first-quarter sales rose 10% while net income nearly doubled from a year ago.

Net income for the first quarter ended March 31 was $298,000, equal to 2c per share on the common stock, up sharply from $100,000, or 1c per share, in the first quarter of 2006. Sales were $24.7 million, which compared with $22.5 million the same period a year ago.

"We are encouraged with the direction of our first quarter," said Eric Eddings, president and chief executive officer of Monterey Gourmet Foods. "Key contributors to our growth were refrigerated pasta up 17%, tamales sales up 15%, and our organic products up 8% when comparing first quarter 2007 to first quarter 2006.

"We continue to make process improvements and introduce new innovative products, some of which have been delayed into the second quarter and are now being made available to our customers and distributors. Our new products are succeeding in the market; SG&A (selling, general and administrative) costs are down, with an emphasis on efficient promotional spending; and we have a strong, motivated management team."

The company has reduced key brand item offerings by 25% to reduce the number of short, inefficient production runs that historically challenged margins, Mr. Eddings said.

Monterey Gourmet Foods manufactures fresh gourmet refrigerated food products at its corporate headquarters in Salinas and at a plant in Eugene, Ore.

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